Demand-oriented innovation of firms in China: An empirical study

Changsheng Xu, Jingjing Wang and Hai Wang ()
Additional contact information
Changsheng Xu: School of Economics, Huazhong University of Science and Technology, Wuhan 430074, China
Jingjing Wang: School of Economics, Huazhong University of Science and Technology, Wuhan 430074, China
Hai Wang: School of Economics, Huazhong University of Science and Technology, Wuhan 430074, China

Frontiers of Economics in China-Selected Publications from Chinese Universities, 2008, vol. 3, issue 4, 548-559

Abstract: This paper analyzes the interrelationship among competition, market size and innovation by using the data from total 37 industries in China within a simultaneous equations model. It finds that: (1) Competition and innovation are mutually-enhanced, and this is the consequence of the long-run Darwinian effect in competitive market; (2) Market size and innovation are also positively correlated, because firms¡¯ innovation is essentially demand-oriented (market-oriented), and innovation impelling technological progress will finally increase market size; (3) Between competition and market size, the effect of competition on market size is ambiguous, while the reverse is significantly positive. The policy implication of this paper is as follows: under the condition that China has especially huge market size and market demand, the industry policy of intensifying competition can stimulate firms¡¯ persistent demand-oriented innovation.

Keywords: competition; market size; demand-oriented innovation (search for similar items in EconPapers)
JEL-codes: D43 L13 O31 (search for similar items in EconPapers)
Date: 2008
References: Add references at CitEc
Citations:

Downloads: (external link)
http://journal.hep.com.cn/fec/EN/10.1007/s11459-008-0027-3 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fec:journl:v:3:y:2008:i:4:p:548-559

Access Statistics for this article

Frontiers of Economics in China-Selected Publications from Chinese Universities is currently edited by LONG Jie

More articles in Frontiers of Economics in China-Selected Publications from Chinese Universities from Higher Education Press
Bibliographic data for series maintained by Frank H. Liu ().